ASEAN Economic Community: the shift from absolute to relative poverty, and the rise of the middle class

Abstract

In 2015 ASEAN has become a community which rests on three pillars: political-security, economic and social-cultural (Jetin and Mikic, 2016). The underlying assumption is that economic development will be fostered by a regional integration deepening, namely a “single market and single production base” which should lead to a convergence of social-cultural development thanks to a catching up process of the late-comers and poorest member states vis-à-vis the more advanced ASEAN Member States (AMS) (Jetin, B. 2016a). This implies a convergence of living standards and a strong decline of poverty. The purpose of this paper is precisely to verify the existence of such a process of convergence among AMS and the nature of this convergence. Which countries are converging? How did poverty evolve and what is the social dynamics implied? Section 1 checks if the existence of ASEAN has favoured a process of convergence of living standards or in other terms a reduction of inequality between countries. In section 2, we show that in several ASEAN countries, absolute poverty has receded but has been replaced by relative, poverty which creates its own set of expectations and potential frustrations. Finally, in section 3, we focus on the emergence of the middle classes and their potential effect on the socio-economic dynamic of ASEAN countries.